August 15, 2007 (LPAC)--The European finance source who warned, last week, of the asset-backed commercial paper (ABCP) which is now front and center of the banking crisis, has told EIR news service that he is convinced that Federal Reserve chairman Ben Bernanke thinks he can manage a "selective financial crash."

In previous crises, former Fed chairman Alan Greenspan did not only lower rates, but expanded the number of institutions that had access to Fed credit. Bernanke, by contrast, is not lowering interest rates, and is putting money into the system selectively, the source said. By the end of a day in which it is injected into the U.S. banking system, this money is available at a rate over 6%. No hedge fund can afford that, and very few banks can afford anything more than 2-4%. So this will not work. Things are far worse, this banker said, than in the 1987 stock market crash or at any other time. Interbank lending continues to freeze up.